Redbird Flight Simulations’ Redhawk is interesting enough, with its diesel engine, modern panel, and refurbished paint and interior. But the workings behind the airplane—Brown Aviation Lease’s finance and lease options—might be the real lasting benefit of the airplane.
When the airplane was announced last year Brown was noted as a partner, and it was assumed the company would be in the business of helping schools pay for the airplane. How a company that primarily provides fleet aircraft to collegiate training programs would be involved was less than clear. Now some details have emerged, and what Brown is planning to offer could be a unique business proposition for flight school operators everywhere.
The funding model is slightly complex, so it’s best to start at the basics. The airplane, which costs somewhere around $250,000, can be purchased outright, financed, or leased. There’s no news there. What is new is the way the lease is structured. Whereas most schools rely on a private owner to lease back an airplane, Brown is offering a contract with a guaranteed lease period, among a few other add-ons to sweeten the deal.
As Redbird rolls out its round refurbished airplanes to outside flight schools, Brown will step in with a test period over the next six months. The school commits to a monthly lease payment and an hourly charge. Brown pays for all the scheduled maintenance and supplies aircraft utilization software that aims to integrate a number of asset management functions.
Given the flat monthly fee, the cost of the airplane will vary based on how much it’s flown each month. But a Brown representative said that during the test period, a school that flies 70 hours a month should expect to pay around $81 an hour, while one that flies only 40 hours a month will pay more like $95. For that price the school gets a guaranteed asset, scheduled maintenance, software, and what students will think is a brand new airplane.
One of the intriguing aspects of the program is that Brown considers the initial six-month rollout a true test. Everything from service to rates is up for revision as the company tries to find a balance between what works for them and the school.
That includes the delivery of maintenance, which is initially being handled with each school’s in-house mechanics. Whereas Brown traditionally offered only the financial package to its fleet customers, with Redhawk it’s planning to offer a maintenance management service. Customers will use the provided software to monitor utilization. Brown monitors the software in real-time, and a few hours before every scheduled maintenance interval, sends a package of parts, instructions, and a reimbursement voucher to the school. Unscheduled maintenance not covered under warranty will be the school’s responsibility.
As the program ramps up, Brown hopes to offer even more capability in its management software, and further optimize the pricing to make it work for flight schools of all sizes. As the representative said, they hope to make the process of using and managing the airplane easier so the school can focus on teaching.